This Week’s Can’t-Miss Analysis — 6/28/24
We publish a lot of market-related content each week, and we want to make sure you don’t miss the most important topics. Below are some charts and tables we view as “can’t miss” from the last week.
We began the week with our Chart of the Day on Monday looking at Bloomberg’s % of World Market Cap indices. As shown below, the US now makes up 48% of world stock market cap, which is a record high going back to late 2003. Ten years ago in 2014, the US made up roughly 36% of world market cap, so it has risen 12 percentage points since then. Note that while the US makes up nearly half of world stock market cap, it only makes up about 25% of global GDP.
While most countries have seen their share of world stock market cap fall as the US has risen, India is really the only major player on the world stage that has also seen its share increase consistently over time. As shown below, India has seen its share of world market cap more than double since its COVID low in early 2020.
To continue reading the rest of this week’s “Can’t-Miss” analysis, which includes another dozen or so important market-related topics, sign up for one of our two membership levels with our July 4th special below!
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Below is a snapshot of what’s included so that you can decide which membership option is right for you:
If you missed Bespoke’s Paul Hickey on CNBC earlier this week, you can click here or on the image below to view the segment.
Separately, please read on to learn about a new initiative launching in July that we’re very excited about!
STOCK MARKET SUMMER CAMP FOR STUDENTS
If you or any of your friends or colleagues have children, grandchildren, nieces, or nephews, please take note!
Here at Bespoke we’ve been following the stock market 24/7 for more than two decades, so based on the “10,000 hour” rule, we can confidently say that we are market “pros”.
At the same time, traditional education across grades K-12 doesn’t focus on the stock market, investing, and how it all works.
For years, we’ve thought about addressing the “stock market literacy gap” for students across the country. Now, we’ve come up with a plan!
Starting this summer, we are now offering “Stock Market Camp” for students in grades 5-8 and 9-12!
Bespoke’s Stock Market Camp will run for five days from Monday-Friday with each live Zoom class lasting roughly 75 minutes. Camp will be fun, engaging, and interactive, and by the end of the week, students will have a basic understanding of how the stock market and investing works! If a live class is missed, a recording will be available.
We don’t have to tell you how valuable knowing this information at a young age can be! Instead of kids playing video games, scrolling through TikTok, or messing around on Snapchat, we think our five-day Stock Market Camp will pay major dividends down the road!
For now we are making our Stock Market Camp available to students that are referenced by Bespoke readers. We are running one week of camp for high school students (grades 9-12) from July 22nd-26th, and one week of camp for middle school students (grades 5-8) from August 12th-16th. Each weekly camp will be capped at 40 students max, so please sign up ASAP to reserve your student’s spot. You can purchase as many spots as you’d like or forward this email to colleagues and have them sign up.
SIGN UP YOUR STUDENT OR STUDENTS TODAY AS THE CAMPS ARE LIMITED TO JUST 40 ATTENDEES!
We will touch base after sign-up to gather the pertinent information. If you sign up and the student cannot attend during the dates listed above, we can either provide access to a full recording of the camp or a credit for a future camp. Refunds will be provided upon request if we are notified at least one week before the camp’s start date.
Please reach out if you have any questions about Bespoke’s Stock Market Camp. The camp is for informational and educational purposes only, and there will be no investment advice or recommendations provided. All discussions will be impersonal and historical in nature. There will be no forward-looking analysis or discussion.
Finally, if you’re not ready to sign up for a Bespoke subscription or our Stock Market Camp for a student, go check out our Bespoke Threads site to pick up some super-soft Bespoke merch!!!
Have a great weekend!
Bespoke’s Morning Lineup – 6/28/24 – The Aftermath
See what’s driving market performance around the world in today’s Morning Lineup. Bespoke’s Morning Lineup is the best way to start your trading day. Read it now by starting a two-week trial to Bespoke Premium. CLICK HERE to learn more and start your trial.
“The end may justify the means as long as there is something that justifies the end.” – Leon Trotsky
Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.
Was there a debate last night? Futures are modestly positive this morning despite a very weak earnings report from Nike (NKE) where the stock is down over 15% in the pre-market in what would be the worst one-day reaction to an earnings report since at least 2001. Several economic reports were just released, and the results have generally been positive. Personal Income was slightly stronger than expected, Personal Spending was slightly weaker, and PCE inflation data was right in line with estimates.
In yesterday’s Morning Lineup note we noted that “barring something completely unexpected, it’s hard to see this night being looked back at as a major milestone come November.” Last night’s debate met the bar. Politico called it the “worst performance of any general election presidential candidate in any debate in modern American history.” NBC News noted that it sent “Democrats into a panic”. A New York Times headline described it as “frightening”, “shaky”, and “halting”. CNN referred to it as ‘disastrous”. On the other side of the Atlantic, Sky News called it “excruciating” and said that some Democrats described it as a “car crash”, BBC called Biden’s performance “incoherent”, and The Economist described it as “horrific” and “casts his entire candidacy into doubt”. Keep in mind, that these aren’t publications that are typically known as leaning conservative.
The initial reaction in the betting markets was swift. As shown in the snapshot from electionbettingodds.com, while Trump’s odds of winning increased 4 percentage points to 59.7%, Biden’s chances plummeted by nearly 15 percentage points to 21.3%. Interestingly, though, on a generic party basis, Democratics odds declined by just 3.2 percentage points as the chances for a candidate other than Biden on the Democratic side grow.
While the Democratic versus Republican party matchup didn’t move nearly as much as Biden’s odds, it was a big move relative to history. As shown in the chart below, the odds of a Republican victory in November are right near the highest levels since at least 2022, and the only time the odds were higher was in late 2023.
The reason Biden’s odds had such a large decline relative to Trump’s increase comes down basically to one person- Gavin Newsom. As shown in the chart below, overnight, Newsom’s odds of being elected in November shot up to 10% for the first time, and he’s now nearly half as likely to be elected in November as Biden! Obviously, it’s still early and a lot can and will likely change between now and November. If you identify as Democrat, Republican, or unaffiliated with either party, if you watched last night’s debate, you won’t forget it.
The Closer – GDP, Claims Demographics, Implementation Breakout – 6/27/24
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Looking for deeper insight into markets? In tonight’s Closer sent to Bespoke Institutional clients, we lead off with an update on Mexico’s central bank decision and US GDP revision (page 1). We then dive into the trade balance (page 2) and recap today’s 7-year note auction (page 3). We then look at the latest update of Characteristics of the Unemployment Insurance Claimants (page 4 and 5). We close out with a note on the breakout of our AI Implementation basket (page 6).
See today’s full post-market Closer and everything else Bespoke publishes by starting a 14-day trial to Bespoke Institutional today!
Bespoke’s Weekly Sector Snapshot — 6/27/24
Chart of the Day – First Solar (FSLR)
The Bespoke 50 Growth Stocks — 6/27/24
The “Bespoke 50” is a basket of noteworthy growth stocks in the Russell 3,000. To make the list, a stock must have strong earnings growth prospects along with an attractive price chart based on Bespoke’s analysis. There were 14 changes to the list this week.
The Bespoke 50 is available with a Bespoke Premium subscription or a Bespoke Institutional subscription. With Bespoke Premium, you’ll receive a number of daily market updates from us along with our weekly newsletter and a portion of our investor tools. With Bespoke Institutional, you’ll receive everything that’s included with Premium plus additional daily macro analysis and more stock-specific research.
To see all 50 stocks that currently make up the Bespoke 50, simply start a two-week trial to Bespoke Premium or Bespoke Institutional.
The Bespoke 50 performance chart shown does not represent actual investment results. The Bespoke 50 is updated monthly on Thursdays unless otherwise noted. Performance is based on equally weighting each of the 50 stocks (2% each) and is calculated using each stock’s opening price as of Friday morning after publication. Entry prices and exit prices used for stocks that are added or removed from the Bespoke 50 are based on Friday’s opening price. Any potential commissions, brokerage fees, or dividends are not included in the Bespoke 50 performance calculation, but the performance shown is net of a hypothetical annual advisory fee of 0.85%. Performance tracking for the Bespoke 50 and the Russell 3,000 total return index begins on March 5th, 2012 when the Bespoke 50 was first published. Past performance is not a guarantee of future results. The Bespoke 50 is meant to be an idea generator for investors and not a recommendation to buy or sell any specific securities. It is not personalized advice because it in no way takes into account an investor’s individual needs. As always, investors should conduct their own research when buying or selling individual securities. Click here to read our full disclosure on hypothetical performance tracking. Bespoke representatives or wealth management clients may have positions in securities discussed or mentioned in its published content.
Bespoke’s Morning Lineup – 6/27/24 – Data Tsunami
See what’s driving market performance around the world in today’s Morning Lineup. Bespoke’s Morning Lineup is the best way to start your trading day. Read it now by starting a two-week trial to Bespoke Premium. CLICK HERE to learn more and start your trial.
“It is in knowledge that man has found his greatness and his happiness.” – James Smithson
Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.
There’s a monster list of economic data on the calendar this morning, and most of it will be hitting the tape at 8:30, so good luck trying to keep track of it. In a nutshell, initial jobless claims were basically in line with forecasts while continuing claims were modestly higher than expected. Inflation data was a bit higher than expected, and Durable Goods were better than expected. Ahead of the data, futures were modestly lower following overnight weakness in Asia and Europe. Crude oil is higher and above $81 per barrel, while the 10-year yield is unchanged at 4.33%. One of the biggest drivers of the weakness this morning comes from Micron (MU) which is down 6% in the premarket after reporting better-than-expected earnings but merely reaffirming guidance. The weakness in MU has overflowed into the entire semiconductor space, including Nvidia (NVDA) which is down 2%.
Outside of India, major Asian equity indices traded lower overnight as Hong Kong led the losses with the Hang Seng down over 2%. China’s Shanghai Composite finished down 0.9%, and the Nikkei was down 0.8%. In China, Industrial profits were down 3.4% YTD and improved from April’s YTD reading of 4.3% while Retail Sales in Japan rose more than expected (3.0% y/y vs 2.0% estimate). Following the lead of Asia, European stocks are also lower this morning, but not by as much as their peers in Asia. The STOXX 600 is down 0.3% with the biggest losses in France (-0.7%) and Spain (-0.7%) while Germany is slightly higher.
With the S&P 500’s price and net daily breadth moving in opposite directions for five trading days in a row now, the daily divergences have started to add up and the gap between the S&P 500 and its cumulative A/D line has widened. While price and breadth tracked each other very closely for the eleven-month ending about a month ago, the last month has seen each move in opposite directions.
With the first half ending tomorrow, we wanted to see how the recent daily breadth divergences this year compared to the first half of prior years. Through yesterday’s close, the S&P 500’s price and daily breadth readings moved in opposite directions on 23% of all trading days. Dating back to 1990, that level is tied for the most ever. The only other year where there were as many daily breadth divergences was in 1995, and the only other year that was even close was 2000. While 1995 and 2000 may have been similar in terms of breath divergences, from a market perspective, that’s about where the similarities end.
The Closer – Price and Breadth on Different Wavelengths – 6/26/24
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Looking for deeper insight into markets? In tonight’s Closer sent to Bespoke Institutional clients, we start out with a note on the latest earnings and the Nasdaq 100 (page 1) followed by a dive into today’s new home sales (page 2) with commentary regarding affordability and homebuilders (page 3). We then look into the historic divergence between price and breadth (pages 4 and 5). Afterward, we show the relative strength of market cap versus equal weight sector ETFs (page 6). We then turn over to the latest EIA data (page 7) and the latest 5 year note auction (page 8).
See today’s full post-market Closer and everything else Bespoke publishes by starting a 14-day trial to Bespoke Institutional today!
Daily Sector Snapshot — 6/26/24
New Highs for Home Prices in 13 of 20 Cities
The latest monthly data on home prices from S&P CoreLogic’s Case Shiller indices was released yesterday. These indices track home prices in 20 major cities/regions around the US.
At the national level, home prices hit another all-time high in April (the data is released on a two-month lag). Month-over-month, the National index rose 1.2%, and it’s up 6.3% year-over-year.
Below is a look at the Case Shiller National home price index since 1990 compared to inflation as measured by CPI. As shown, home prices are up more than 300% over this time frame, which is good enough for just over double the rate of inflation.
Below is a table showing the change in home prices over various points in time for the Case Shiller indices. Boston and San Francisco were up the most month-over-month with 2% gains. The only cities that weren’t up at least 1% month-over-month were DC, Miami, Tampa, and Phoenix, but even these cities all gained at least 0.5%. On a year-over-year basis, all twenty cities are up at least 1.5%, while the composite indices are up 6-8%.
In late 2022/early 2023, we saw a pullback in home prices following an initial post-COVID surge in 2020 and 2021. At this point, though, 13 of 20 cities are back to new highs after prices have gone back up 10%+ for most cities since their 2023 lows. San Francisco, Seattle, Phoenix, Portland, Dallas, Las Vegas, and Denver are the seven cities that aren’t back to new highs yet. As you probably noticed, most of these are cities on the west coast where inventories are a lot higher than they are in areas like the northeast.
Since just before COVID hit in February 2020, home prices are currently up about 50% nationally. Miami and Tampa are up the most since COVID with gains of 70%+, while San Francisco, Minneapolis, Portland, and DC are up the least.
Below are Case Shiller home price charts for the twenty cities and three composite indices. Cities highlighted in green are trading at all-time highs.
